TIN IN THE SINO-SOVIET BLOC

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• Document Creation Date: December 23, 2016
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• Sequence Number: 2
• Publication Date: May 1, 1961
• Content Type: REPORT

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N? 57
Economic Intelligence Report
TIN IN THE SINO-SOVIET BLOC
CIA/RR ER 61-23
May 1961
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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SECRET
Economic Intelligence Report
TIN IN THE SINO-SOVIET BLOC
CIA/RR ER 61-23
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
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FOREWORD
The purpose of this report is to assess the supply of and demand
for tin in the Sino-Soviet Bloc and to estimate the potential sig-
nificance of Soviet supplies of tin to the Free World. The following
steps have been taken in order to assess these problems. Estimates
of production of tin have been developed, taking into account the
producing potential within the Sino-Soviet Bloc. The probable demand
for tin in the countries of the Bloc was estimated, and trade data
were tabulated and evaluated. The methodology employed in deriving
the estimates contained in this report is included in the text.
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Summary
I.
II.
CONTENTS
Page
1
5
5
Introduction
Resources
A. USSR
6
1. Quantity of Reserves
6
2. Quality of Ore
6
3. Location of Deposits
6
B. Communist China
7
1. Quantity of Reserves
7
2. Quality of Ore
7
3. Location of Deposits
8
a
C. East Germany
8
D. North Vietnam
8
III.
Production
8
A. USSR
9
1.
Mining and Concentrating
9
2.
Metallurgical Reduction
13
3.
Production of Secondary Tin
15
B.
Communist China
15
1.
Output from Mines
15
2.
Output of Concentrate
16
3.
Smelting and Refining
16
C.
North Vietnam
18
D.
European Satellites
19
1.
East Germany
19
2.
Poland
20
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Page
IV.
Trade
20
A.
East-West
20
B.
Intra-Bloc
22
V.
Consumption
22
A.
USSR
25
B.
European Satellites
28
C.
Communist China, North Korea, and North Vietnam . .
28
VI.
Relationship of Supply and Demand
28
VII.
Internal Costs and Prices
30
A.
USSR
30
B.
Communist China
33
C.
East Germany
311.
Appendixes
Appendix A. Principal Tin Enterprises in the Sino-Soviet
Bloc
Appendix B. Ruble/Dollar Price Ratios
35
Tables
1. Estimated Production of Primary Tin in the Sino-Soviet
Bloc, 1950-60 9
2. Estimated Production of Primary Tin in the USSR,
Selected Years, 1940-65 11
3. Estimated Production of Primary Tin in Communist China,
17
1950-60 and Plan for 1965
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Estimated Net Exports of Tin from the Sino-
,Soviet Bloc to the Free World, 1955-60 .
5. Trade in Tin Within the Sino-Soviet Bloc,
1959
6. Estimated Consumption of Tin in the Sino-
Soviet Bloc, 1950-60
Estimated Consumption of Primary Tin in
Selected Countries, 1959
Page
21
23
25
8,. Estimated Consumption of Tin by Major Con-
suming Sector in the USSR and the US, 1937
and 1955 26
9. Estimated Consumption of Tin,in the USSR,
1950-59 and 1965 .... . .. . . . . . 27
10. Estimated Balance of Supply and Demand of Tin
in the Sino-Soviet Bloo, 1950-60 29
11. Ruble/Dollar Price Ratios for Selected Com-
modities in the USSR 32
12. Major Tin Mining and Processing Facilities
in the USSR 37
13. Major Tin Mining and Processing Facilities
in Communist China 41
Maps
Following Page
Figure 1. World Production of Mined Tin 1959 . 10
Figure 2. Sino-Soviet Bloc: Principal Tin
Mining Areas and Processing
Facilities
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TIN IN lab, SIN0-S0V1E1 BLOC*
Summary
During the 1950's the Sino-Soviet Bloc became a major producer
of tin. In 1950 the Bloc produced about 14,000 tons** of tin, Which
was about 8 percent of the world total. By 1960, production of tin
by the Bloc had nearly quadrupled, reaching a total of more than
51,000 tons, or almost one-fourth of the world total. Production
plans for 1965 indicate another substantial increase to about 85,000
tons*** (more than one-half as much as the Free World produced in
1960). As far as can be determined at this time, the Bloc should
have no serious difficulty in achieving this goal. Tin reserves in
the Bloc are sufficiently large to support an annual production of
this magnitude for many years, and although the ores generally are
of low grade, Bloc technology is adequate to handle successfully
whatever processing problems may be encountered.
Predominant among the tin-producing countries in the Sino-Soviet
Bloc is Communist China. From 1950 to 1960, China's share of the tin
produced by the Bloc increased from about 42 percent to about 63 per-
cent. By 1965, China is expected to account for about 67 percent of
such production. The second largest producer of tin in the Bloc, the
USSR, in 1960 produced about 35 percent of the Bloc's total output of
tin. East Germany and North Vietnam, the only other producers of tin
in the Bloc, accounted for only about 2 percent of the Bloc's total
output in 1960.
Consumption of tin in the Sino-Soviet Bloc has not increased as
rapidly as has production, but it has more than doubled during 1950-60.
This rate of growth is not expected to -change materially, and annual
consumption of tin in the Bloc by 1965 should be About 55,000 tons.
The USSR is by far the largest consumer of tin in the Bloc, taking much
more than one-half of the Bloc's annual available supply of tin. Con-
sumption of about 24,000 tons of tin in the USSR in 1960, however,
contrasts strongly with the 83,000 tons of tin consumed in the US.
The contrast is even greater if consumption levels in the two coun-
tries are compared on a per capita basis. In the USSR in 1959, con-
sumption of tin per capita was about 0.11 kilogram and in the US
* The estimates and conclusions in this report represent the best
judgment of this Office as of 15 April 1961.
** Tonnages are given in metric tons throughout this report.
*** Including about 4,000 tons of secondary metal.
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0.44 kilogram. The great difference between the level of consump-
tion of tin in the USSR and the US reflects the emphasis that the
USSR places on production of capital goods, whereas the US empha-
sizes production of consumer goods. One of the principal uses of
tin in both countries is in tinplate, the bulk of which is fabricated
into tin cans for preserving food. In 1959 the USSR produced only
7.4 percent as much tinplate as the US. Until the Soviet economy
becomes more oriented to production of consumer goods, consumption
of tin is likely to continue lagging far behind that of the US. The
same generalization can be made about consumption of tin in the entire
Bloc.
Communist China is the only country in the Sino-Soviet Bloc that
produces a surplus of tin, and Communist China also is the only pro-
ducer of tin whose costs of production are believed to compare favor-
ably with those of the major producers in the Free World. Information
on costs of producing tin in the USSR and East Germany clearly indi-
cates that their costs are much higher than those of the Free World.
As long as production of tin in the Bloc is in excess of consumption
needs, continuation of these high-cost operations is somewhat enig-
matic. Were either the USSR or East Germany to discontinue production
from all but their lowest cost operations, however, their dependence
on the tin industry of China would increase greatly. Thus far, neither
the USSR nor East Germany has been willing to increase its dependence
on China by restricting production of tin to only the most efficient
producers. On the contrary, plans of the USSR, in particular, indi-
cate a trend in the opposite direction. The USSR not only intends to
increase production of tin but also is making efforts to reduce pro-
duction costs.
From the end of World War II until 1955, the Sino-Soviet Bloc was
a net importer of tin from the Free World. In 1955, however, the
Bloc became a net exporter of tin to the Free World, a position that
has been maintained. This shift has come about fundamentally by the
rapid increase in production of tin in Communist China.
Because the tin trade of the Sino-Soviet Bloc had consisted en-
tirely of imports, the exports that initially were very small in 1955
became a great concern to producers of tin in the Free World when
they suddenly reached sizable proportions in 1958. Annual production
of tin in the West as early as 1950 exceeded consumption, and efforts
were being made through the International Tin Council (ITC) to control
the surplus in order to maintain a stable market price. By 1958,
however, the Bloc's exports of tin were so large that the market
stabilization scheme collapsed. As a result, the price of tin in the
world market dropped precipitously. After much adverse publicity,
the USSR agreed to cooperate with the ITC by limiting exports of tin
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to the West to 13,500 tons in 1959. In general, the USSR subsequently
has limited annual exports of tin to the Free World to about the same
amount. Other countries in the Bloc, however, mainly China, also have
exported tin to the Free World. To date, such exports have been rela-
tively snail, and the ITC has been able to accommodate the additional
tonnage without great difficulty.
It appears from the plans of the Sino-Soviet Bloc for increasing
production of tin and from the trend in domestic consumption that the
Bloc may achieve an annual surplus of about 30,000 tons by 1965. The
possibility exists of an increasingly serious problem for the ITC and
its member producing countries, and the ITC may have to renegotiate
with the Bloc to accommodate the export of the surplus quantity to
Western markets. In such an event the role of Communist China in
the negotiations probably will be a major one, in contrast to the
situation that existed in 1958 when the USSR was the only Bloc coun-
try involved. In addition, the USSR may augment its existing stock-
pile for use in the event of either an East-West conflict or a de-
crease in the shipments of tin from China.
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I. Introduction
In spite of the widespread occurrence of tin minerals, commer-
cial deposits of tin are found in relatively few areas of the world,
principally in the less developed countries of Asia, Africa, and
South America and in China and the USSR. Over the years, because of
the necessity of depending on these remote sources for this strategic
raw material, all the major industrial countries of the world have
been engaged in intensive programs to minimize their requirements for
tin. Although some successes have been achieved through technological
advances and the development of substitutes, certain tin alloys have
continued to be essential for many industrial applications.
World production and consumption of tin have fluctuated widely
for many years, and, in general, production has exceeded demand.
Since the early 1930s, there have been continual international ef-
forts to correct the imbalance between the demand for the metal and
the level of production. With the fulfillment of the US program for
stockpiling tin, which absorbed much of the Free World's average
annual surplus of about 30,000 tons of tin during 1950-55, the Inter-
national Tin Agreement of 1956 attempted to maintain a stable market
price for tin principally by establishing export quotas for the tin-
producing countries. These export quotas had the effect of drastically
curtailing production in those less developed countries where tin is
the major industry.
1 ? Exports of tin from the Sino-Soviet Bloc during the last half of
the 1950's upset the regulated stability of the tin market in the
Free World. ?
4.
II. Resources
Of an estimated total world reserve of 7.6 million tons of tin
contained in ore, the Sino-Soviet Bloc has about 33 percent, or 2.5
million tons. 1/* The estimated distribution of tin reserves within
the Bloc is as follows:
Country Thousand Tons
USSR
Communist China
East Germany
North Vietnam
Poland
Total
500
1,900
65
Negl.
Negl.
22_246
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A. USSR
1. Quantity of Reserves
Although the USSR is known to have numerous deposits of
tin, current information on the magnitude of the reserves is incom-
plete. In 1944, Soviet officials claimed that reserves of tin ore
were exceeded only by those of Southeast Asia (presumably including
southern China) and Bolivia. 2/ This statement implied a Soviet re-
serve of between 300,000 and 500,000 tons of contained metal. Since
that time the USSR has continued to explore for tin ores. These
efforts have been successful to some extent, for increases in tin
reserves have been reported as recently as 1959. 2/ On the basis
of this information the tin reserves of the USSR as of 1960 are esti-
mated to be about 500,000 tons.
2. Quality of Ore
Pure cassiterite (tin dioxide), the mineral from which
nearly all the world's tin is produced, theoretically contains
78.6 percent tin, and the ore containing this mineral occurs in two
types of deposits -- placer and lode.* Although placer ore has a
much lower tin content than lode ore, less than 0.3 percent compared
with a normal range of 1 to 8 percent,1,4/ it generally contains fewer
impurities and is therefore easier to concentrate. In the Free World
at least one-half of the tin reserves are in placer deposits, 2/ but
only 9 percent of the tin reserves of the USSR are in such deposits. g
Another source of tin is stannite? also known as tin
pyrite. At present, stannite ore is not being exploited commercially,
but a technological process for the recovery of tin from stannite ore
reportedly is being developed in the USSR. 2/ The theoretical tin
content in pure stannite is 27.5 percent, but the high content of sul-
fur and copper impedes efficient recovery of the tin. ?,./ Outside the
USSR the only occurrences of stannite ore that appear to be of com-
mercial interest are in Bolivia. 2/
3. Location of Deposits
Virtually all the tin reserves in the USSR are located
in East Siberia and the Soviet Far East. As of 1 January 1938 the
prospected tin reserves of the USSR in terms of metal content were
distributed geographically as follows 12/:
' Placer ore can be mined by some type of open-work method, but lode
ore usually is mined by more expensive underground methods.
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Area
Percent
RSFSR
81.1
Chitinskaya Oblast
29.2
Yakutskaya ASSR
37.2
Primorskiy Kray
14.7
Kazakh SSR
10.8
Kirgiz SSR
7.0
Tadzhik SSR
1.1
Total reserves 100.0
Although geological prospecting since World War II has resulted in the
discovery of tin deposits in other parts of the USSR, the relative
importance of the two largest areas of tin reserves, the Yakutskaya
ASSR 11/ and Chitinskaya Oblast, 12/ has not been changed. Signifi-
cant additional reserves have been discovered in Magannnskaya Oblast
and in the Khabarovskiy and Primorskiy Krays in the Soviet Far East.
B. Communist China
1. Quantity of Reserves
Although definite information on the extent of the re-
sources of tin in Communist China is not available, they are believed
to be very large. Estimates of tin reserves in pre-Communist China
range from 650,000 tons 13/ to 1.9 million tons of tin contained in
ore, 1W and during the past 10 years additional discoveries have
been claimed. In 1958 the Vice Minister of Geology stated that China
had the largest resources of tin in the world. 12/ For comparison,
Malaya, which heretofore has been considered to have the largest re-
sources, is estimated to possess tin reserves of about 1.5 million
tons of metal contained in ore. 1?2/ In view of the official nature
of the claim made for the largest reserves in the world, the current
tin reserves in China probably approach in magnitude the upper limit
of the range of estimates made in the pre-Communist era.
2. Quality of Ore
Tin ore occurs in Communist China in both lode and placer
deposits, but.prohably most of the reserves are contained in lode
deposits. Some of the lode ores have a tin content as high as 2 per-
cent, 12/ and most of them contain such impurities as iron, copper,
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zinc, lead, antimony, bismuth, and arsenic. The removal of these
metals, necessary to produce commercial grades of tin, is reported
to be very difficult. IN Furthermore, the grains of cassiterite in
these ores are unusually small, a factor that inhibits a high recovery
of the tin content. 1
3. Location of Deposits
Of the total tin reserves in Communist China, probably
about 80 percent is located in Yunnan Province in the Ko-chiu area
(23023' N 103?09' E). 22/ The remainder of the tin resources of
China consists of scattered deposits in south and southwestern China,
particularly in the Kwangsi Chuang Autonomous Region and in Kiangsi,
Hunan, and Kwangtung Provinces. 21/ Recent geological prospecting
programs have resulted in reports of the discovery of additional de-
posits of tin ore in far western and northwestern China. As yet,
however, very little is known of the size, quality, and economic
potential of these occurrences.
C. East Germany
East Germany is the only European Satellite with any appre-
ciable tin reserves. In 1953 the total tin reserves in East Germany
were estimated at 35 million tons of ore, of which about 25 million
tons (equivalent to about 65,000 tons of contained metal) were classi-
fied as known and probable reserves, the remainder being "possible"
reserves of very low metal content. 22/ All the reserves are in lode
deposits located in the Erzgebirge (Saxony Ore Mountains) near the
Czechoslovak border of East Germany. Ores now being mined there are
complex and have a metal content ranging between 0.30 and 0.35 per-
cent tin. Q./
D. North Vietnam
North Vietnam apparently has sufficient reserves to support
a small tin industry. gi/ In terms of the Bloc as a whole, however,
these reserves are relatively insignificant.
III. Production
During 1950-60 the annual production of primary tin in the Sino-
Soviet Bloc increased from an estimated total of about 14,000 tons
to more than 51,000 tons, as shown in Table l,* or from about 8 per-
cent of the world's total production in 1950 to about 25 percent
in 1960. 25/ Within the Bloc, Communist China accounted for about
* Table 1 follows on p. 9.
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Table 1
Estimated Production of Primary Tin in the Sino-Soviet Bloc
1950-60
Thousand Metric Tons
Country
1950
1951
1952
1,953
1954
1955
1956
1957
1958
1959
1960
USSR
8.1
8.8
9.6
10.5
11.5
12.6
13.8
15.0
16.0
17.0
18.0
Communist
China
6.0
7.3
13.8
15.0
16.0
18.o
19.2
25.8
31.0
32.0
32.0
East
Germany
0.2
0.2
Q?24
0.5
0.6
0.6
0.7
o.8
0.8
0.7
0.7
North
Vietnam
0
0
0
0
0
0
0
0.1
0.2
0.4
0.4
Total 14.3 16.3 23.8 26.0 28.1 31.2 224/ .41.7 48.0 50.1 51.1
63 percent of the tin produced in 1960, the USSR produced about 35 per-
cent, and East Germany and North Vietnam each accounted for about 1 per-
cent. The relative importance of the countries of the Sino-Soviet Bloc
in relation to the other tin-producing countries of the world is shown
on the map, Figure 1.*
A. USSR
In 1960 the USSR accounted for about 8 percent of the world
production of primary tin. The estimated production of primary tin
in the USSR for the period 1940-65 is shown in Table 2.**
No specific goal has been announced for production of tin under
the Seven Year Plan (1959-65), but production of tin in 1965 probably will
be about 22,000 to 23,000 tons. Most of the increase in production is ex-
pected to be obtained through the improved utilization of existing capacity.
1. Mining and Concentrating
The major tin ore mining and concentrating enterprises of
the USSR are located in East Siberia and the Far East. The regional
distribution of production of tin ore in the USSR, in percent of the
total Soviet production, is as follows 2g:
* Following p. 10.
** Table 2 follows on p. 11.
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Area
Percent
East Siberia
Yakutskaya ASSR
25 to 30
Chitinskaya Oblast
15
Far East
Magadanskaya Oblast
15
Khabarovskiy Kray
15
Primorskiy Kray
15
Remainder (including Kazakh, Kirgiz,
Tadzhik, and Uzbek SSRIs) 10 to 15
Total 100
Locations of the principal tin mining and processing facilities in
the Sino-Soviet Bloc are shown on the map, Figure 2.*
Of the tin mined in the USSR, 70 to 75 percent is from
lode deposits. 22/ In the Free World, however, about 70 percent of
the tin ore is mined from placer deposits. LEY Placer deposits are
exploited by dredging or open-cut methods, whereas lode deposits
generally are worked by underground methods. In the USSR, however,
there has been a decided shift away from underground operations, and
quarry methods are now being applied to the exploitation of an in-
creasing number of lode deposits. Open-cut working of tin mines in
the USSR has increased from 12 percent of the total tin mined in
1944 22/ to about 50 percent in 1956. 12/ Where this conversion has
taken place, the cost of the ore reportedly has been reduced 40 per-
cent. 11/
Lode ore, in addition to being more difficult to mine,
also is generally more difficult to process because of its more com-
plex nature. In the USSR, more than 95 percent of the tin ore mined
is a complex, polymetallic sulfide ore containing a variety of impuri-
ties in the form of metallic sulfides and oxides. 12/ These impuri-
ties must be removed to produce a tin metal of high quality.
The principal methods employed for treating tin ores in
the USSR are gravitational and magnetic separation and flotation.
The flotation method has been used industrially in the USSR since
* Following p. 10.
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Table 2
?
Estimated Production of Primary Tin in the USSR
Selected Years, 1940-65
Year Thousand Metric Tons
1940 2/ 2.0
1943 12/ 3.4
1945 2/ 4.4
1946 2/ 5.3
1947 2/ 6.2
1948 1/ 6.8
1949 1/ 7.4
1950 1/ 8.1
1951 1/ 8.8
1952 1/ 9.6
1953 1/ 10.5
1954 1/ 11.5
1955 1/ 12.6
1956 1/ 13.8
1957 e 15.0
1958 12/ 16.0
1959 II/ 17.0
1960 1/ 18.0
1965 ?1/ 22.4
a. On the assumption that a minimum of 200
tons of 40 percent concentrate were smelted in
1934, 11/ production of tin metal would have
been 80 tons. This volume of production was
assumed for 1934. Because tin smelting in
1938 was 10 times that in 1934, 121/ or 800 tons,
a level of 500 tons was interpolated for 1937.
Production in 1940 was reported to be 400 per-
cent of that in 1937. 12/
b. Production in 1943 was reported to be 168
percent of that in 1940. 1g
c. Production in 1945 was reported to be 222
percent of that in 1940. 1//
d. Production in 1946 was reported to be 119.1
percent of that in 1945. J,1.8/
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Table 2
Estimated Production of Primary Tin in the USSR
Selected Years, 1940-65
(Continued)
e. Production for 9 months of 1947 was re-
ported to be 117.7 percent of that in the cor-
responding period of 1946. TV This percentage
was assumed to have applied for the entire year.
f. Interpolated between 1947 and 1957.
g. In 1957, about 5,000 tons of tin were used
in production of tinplate for the manufacture
of tin cans.0/ It also was indicated that in
1957 about one-third of the tin produced went
into preparation of tinplate for the canning in-
dustry. 41/
h. Interpolated between 1957 and 1960.
i. In 1960, production of tinplate for the
canning industry was to require about 6,000
tons of tin. 142/ It was assumed that the same
relationship to production existed as that in
1957.
j. Specific production goals for tin under the
Seven Year Plan have not been announced, but
the increase planned for 1965 reportedly is
about 40 percent more than the level for
1958. .111/
1950. LILV The following recovery rates that are obtained in Soviet
concentrating plants compare favorably with those in the Free
World)1V:
Percent of
Total Concentrating Plants
Rate of Recovery
of Tin from Ore
(Percent)
20 70 to 90
60 60 to 70
20 Less than 60
. The average tin content of the concentrate produced in
the USSR ranges between 60 and 70 percent.11Y Concentrate with a
high tin content is produced by a two-phase method of concentrating,
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which also provides for the recovery of other elements that are pres-
ent in the complex ores. After initial concentrating near the mining
area, the product is shipped to finishing plants, where a 70 percent
tin concentrate is produced and where such metals as lead, zinc, mer-
cury, tungsten, and lithium are recovered.
2. Metallurgical Reduction
In contrast to the mining and concentrating operations,
which are dispersed widely throughout the Far Eastern USSR, nearly
all of the metallurgical reduction and refining of tin is carried
out in three tin plants: the Central Tin Plant at Novosibirsk
(55?02' N - 82?55' E) IV and the tin plants at Podol'sk (55?26' N -
37033' E) and at Ryazan (54038 N - 39?44' E). /2.:8/ The Central Tin
Plant at Novosibirsk is the largest and most important of the three.
As all of these major tin plants have been either built or rebuilt
since World War II, the technology employed in them is quite up-to-
date. Small quantities of tin also are produced at other nonferrous
installations, such as the Moscow Copper Smelting and Electrolytic
Plant imeni Molotova, the Chimkent and the Tetyukhe lead plants, and
the Ukrainian Zinc Plant (Ukrtsink) in Konstantinovka.122/
Depending on its tin content, concentrate is smelted in
either a reverberatory or an electric arc furnace. Concentrate with
a low tin content is reduced in a reverberatory furnace to a crude
tin of 97 percent purity, 22/ and that with a high tin content is
smelted in an electric arc furnace. The crude tin produced in the
electric arc smelter may have a tin content as high as 99 percent and
can be used for some purposes without further refining. 21/ Other
advantages from using an electric arc furnace are that flue gases are
eliminated, that continuous operation is possible, and that tempera-
tures can be regulated precisely. i2/ The quality of the concentrate
determines the rate of recovery achieved in smelting, as shown by the
following data
Tin Content
of Concentrate
(Percent)
65 to 73
50 to 65
20 to 50
Rate of Recovery
of Tin in Smelting
(Percent)
85 to 91
74 to 84
50 to 72
For comparison, as much as 98 percent recovery in smelting has been
reported in Malaya.212/
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As can be seen from the above tabulation, sizable quanti-
ties of tin are not recovered in the smelting process. Until recently
the practice in the USSR was to allow from 9 to 50 percent of the tin
actually contained in the concentrate to pass into slags and dusts,
and these were discarded as waste products. Now, through improved
technology, tin is recovered from these wastes. For example, first-
run slags are treated in regular shaft furnaces or water-jacketed fur-
naces, and a crude tin of 93 to 95 percent purity is produced. 25_/
Second-run slags and dusts also are being processed successfully in
electric furnaces or slag-fuming installations at several of the non-
ferrous plants. By 1965, about 12 such installations are scheduled
to be in operation, and nearly 1,000 tons of tin are to be produced
annually from the slags obtained at lead plants alone. 5.?./ The USSR
claims that producing tin metal from these wastes is more economical
than processing low-grade tin ores. 21/
Virtually all the tin produced in the USSR is refined by
the pyrometallurgical (fire-refining) method, 2.1 whereas in the
Free World the electrolytic method also is in use. Although the elec-
trolytic method produces a higher grade of tin, the thermal method ap-
parently is more satisfactory for the USSR. The entire cycle of re-
fining is carried out in a steel kettle heated by coal, mazut, or
electricity, and the refinery slags also are reprocessed. The refined
metal produced is classified according to official state standards.
The minimum tin content required for each grade is as follows 22/:
Minimum Tin Content
Mark (Percent)
01
99.90
02
99.56
03
98.35
04
96.25
In addition to the standard grades of refined tin, tin
of ultrahigh purity is produced by vacuum filtration, vacuum distil-
lation, and zone refining. An industrial-scale shop for zone refin-
ing of tin at the Central Tin Plant at Novosibirsk began operating in
1957. Tin metal with a purity of 99.9998 percent is produced at this
installation with a recovery rate of 80 to 85 percent. Output of this
shop is approximately 145 kilograms per month, and the construction
of a second such installation is being considered.
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3. Production of Secondary Tin
In the early 1930's, more than 2,000 tons of secondary tin
were produced annually in the USSR, Li and current production is
? about 5,000 tons. 162/ Facilities for the recovery of secondary metal
have been installed at the Moscow Copper Smelting and Electrolytic
Plant imeni Molotov, at the Krasnyy Vyborzhets Plant in Leningrad,
and at plants in Verkhneyvinsk and Podol'sk. 63/ Scrap also is treated
at some of the ferrous metallurgical installations where tin plate
is produced and fabricated.
?
Because both runaround scrap* and old scrap are utilized
equally for producing secondary tin, Li/ only one-half of the estimated
current output, or 2,500 tons, is considered an addition to new supply.
Old scrap is supplied at the present time mainly in the form of Babbitt
metal. Runaround scrap consists of the slag formed in production of
tinplate and of the shavings and cuttings from fabricating installa-
tions. Hydrometallurgical methods and resmelting in reverberatory
furnaces both are used in production of secondary tin. Li Refined
metal with a tin content of 99.9 percent can be produced in the re-
processing of runaround scrap and with a tin content of 98.5 percent
in the reprocessing of old scrap. .?./ Most of the secondary tin, how-
ever, is used in alloyed form and consequently does not require re-
fining.
B. Communist China
1. Output from Mines
In 1960, Communist China produced about 20 million tons of
tin ore. Some of the ore had a tin content as hiel as 2 percent, 67/
but the average tin content probably was about 0.25 percent. 16?i The
estimate of ore mined is based on production of about 32,000 tons of
primary tin in 1960** from ore averaging 0.25 percent tin content and
on a rate of recovery of about 60 percent. 1.6.21/
Most of the important tin mines are located in the Ko-chiu
area of Yunnan Province in southwestern China where perhaps 80 percent
of all tin ore is mined in China. At the time of the Communist rise
to power in 1949, most of the ore was obtained from primitive "native"
mines, 1.9/ of which there were several hundred. Under the Communist
administration the mines have been enlarged and modernized. By 1959
the two major underground mines had been completely reequipped with
* Prompt industrial scrap as opposed to scrap obtained from farms,
homes, and junk yards.
** See Table 3, p. 17, below.
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Soviet-designed machinery, and modern ventilation and underground
haulage systems had been installed. 11/ A third major modern under-
ground mine began operation in 1957. 12/ In addition to the develop-
ment of the underground facilities, a number of larger placer mines
have been developed in the Ko-chiu area under Soviet technical direc-
tion. 12/ Insofar as is known, the technique in common usage at these
mines is hydraulic mining. In contrast to the pre-Communist period,
when nearly all the output in this area was derived from underground
mining, as of 1957 as much as 60 percent of the ore was obtained
from open-worked placer mines. /II/
In the other tin mining areas of south and southwestern
China, much of the ore is obtained from small, scattered placer de-
posits, most of which are exploited by hydraulic mining. In addition,
some tin is produced as a byproduct in the processing of tungsten-tin
ores in Hunan and Kiangsi Provinces. 12/
2. Output of Concentrate
In 1960, about 80,000 tons of tin concentrate averaging
60 percent tin content were produced, principally in Yunnan Prov-
ince. 1.Y Only gravity concentrating methods are in use in China,
and recently several Humphrey spirals* have been installed in the
concentrating plants. The rate of recovery has increased from 54 per-
cent in 1952 to a current rate of 64 percent as a result of such im-
provements in this sector of the industry. /1/
3. Smelting and Refining
The metallurgical reduction of tin also is centered in
the Ko-chiu area of Yunnan Province. Smelting is carried out in new
reverberatory furnaces, which were installed with Soviet aid. The
rate of recovery had been raised from 80 percent in 1950 to about
98 percent in 1959, '1,/ and the crude tin produced had a metal content
of 96 to 97 percent. 121/
Both pyrometallurgical and electrolytic refining methods
are used at the Ko-chiu Tin Plant. The rate of recovery is 98 to 99
percent, and the metal produced now has a tin content of 99.6 to
99.8 percent, whereas in 1950 the best grade was 99.0 percent.
Estimated production of refined primary tin in 1950-60 and in 1965
is shown in Table 3.**
* An up-to-date type of concentrating machine.
** Table 3 follows on p. 17.
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Table 3
Estimated Production of Primary Tin in Communist China
1950-60 and Plan for 1965
Year
Thousand Metric Tons
1950
6.0 2/
1951
7.3 12/
1952
13.8 2/
1953
15.0 1./
1954
16.0 2/
1955
18.o 2/
1956
19.2 I/
1957
25.8 B./
1958
31.0 y
1959
32.0 1/
1960
32.0 1/
1965
57.0 1/
a. Production was
put of 15,865 tons
b. Production was
put. _i.12/
c. Production was
1953. 4Di
d. Production in the Ko-chiu area, which accounts for
more than 80 percent of the total, was equal to 250
percent of that in 1950. .1'02/ The total estimate is
based on the assumption that the rate of increase in
the Ko-chiu area was representative of the whole
country.
e. Interpolated between 1953 and 1956.
f. It was assumed that consumption equals production
plus imports minus exports. In 1956, consumption is
estimated to have been 2,000 tons, and exports were at
least 17,200 tons. There were no imports.
g. Production was equal to 187 percent of that in
1952. ?.5/
h. Production of tin concentrates (metal content) was
21.8 times that in 1949./ It was assumed that the
increase also would apply to production of metal.
i. Exports in 1959 and 1960 appear to have been
roughly of the same magnitude as in 1958. On the as-
sumption that consumption equals production plus
equal to 38 percent of the peak out-
' _ELI
equal to 46 percent of the peak out-
equal to 91.7 percent of that in
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Table 3
Estimated Production of Primary Tin in Communist China
1950-60 and Plan for 1965
(Continued)
imports minus exports and that there was a small in-
crease in consumption, there also would have been a
small increase in production.
j. Provision was made in the Second Five Year Plan
(1957-62) for creating new capacity for producing
30,000 tons of metal. Lil/ It was assumed that full
use is to be made of the available capacity.
The potential of the Chinese tin industry is vast. Because
of a planned doubling of plant capacity, it is estimated that production
of primary tin may be as much as 57,000 tons in 1965. The entire Ko-
chiu complex has undergone extensive development under the Communist
regime. Over the last decade, with Soviet aid, new construction and
technology have transformed the Chinese tin industry from a handicraft
state into a relatively modern operation. Power supplies in the area
have been increased greatly by the erection of a thermal-electric
powerplant at Kai-yuan. li@_/ In addition, a new canal has provided a
dependable supply of water, thus alleviating what had been a major
problem in the mining and concentrating phases of the tin industry.
Also the completion of the rebuilding of the K'un-ming - Haiphong Rail-
road in 1957 connects the area directly to an excellent overseas ship-
ping point on the coast of North Vietnam.
C. North Vietnam
The relatively minor output of tin in North Vietnam is not a
major factor in the total supply of the Sino-Soviet Bloc. Tin is
produced from both lode and placer deposits. Production of primary
tin in 1957-60 was as follows L321/:
Year Tons
1957 104
1958 220
1959 355
1960 (Elan) 430
By 1965, production should exceed 500 tons.
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D. European Satellites
1. East Germany
Production of tin in East Germany is based on the exploita-
tion of extremely poor ores in an area that has been mined for the past
800 or 900 years. The tin content of the ore being worked declined
from about 0.4 percent to about 0.2 percent during 1948-58, and the
quality of the explored reserves also is low. .291 Although considera-
tion was given in 1957 to closing the mines, operations have continued.
Three shaft mines now are operating in East Germany --
Altenberg accounts for about 65 percent of the ore mined; Ehrenfrieders-
dorf, somewhat more than 20 percent; and Rodewisch, the remainder of
nearly 15 percent. 21/ To increase production, a new shaft is being
built at Altenberg. 22/ By 1965 the new facilities and techniques are
expected to make possible an increase in the level of production at
Altenberg of 250 percent above that in 1958. .25./
The ore is treated by both gravity concentration and flota-
tion at Altenberg with a resultant concentrate containing about 40 per-
cent tin. The rate of recovery does not exceed 4o to 45 percent. The
ores treated at Ehrenfriedersdorf undergo a more complex processing,
including flotation.21i/
Smelting and refining are carried out at the VEB Zinn-
huette, Freiberg. The crude tin produced at the smelter has a purity
of 99 percent and contains traces of bismuth and copper. Much of the
output of the smelter is consumed in this crude form, and some is re-
fined electrolytically to a purity of 99.6 percent, which is signifi-
cantly lower than the world standard of 99.8 percent purity for first-
grade commercial metal. Because the Freiberg refinery has been unable
to produce a tin equal in purity to imported metal, users prefer im-
ported metal. 22/ Production of crude and refined tin in East Germany
in 1950-60 is estimated as follows
Year
Tons
Crude Tin
Electrolytically
Refined Tin
1950
165
79
1951
220
137
1952
384
147
1953
476
140
1954
602
189
1955
620
220
1956
696
280
1957
814
N.A.
1958
757
N.A.
1959
737
420
1960 (Plan)
729
420
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Production of crude tin in 1965 may reach 1,000 tons. E/ In addi-
tion, East Germany is believed to produce minor quantities of second-
ary tin and tin alloys.
2. Poland
Although deposits of low-grade tin ores have been dis-
covered and an old German tin mine exists in the western territories
of Poland, no primary tin is believed to have been produced under the
Communist regime. In 1951 the ore was analyzed as containing 0.01
percent tin, which was too low for exploitation. .0_/ Although the
mine at Gierczyn near Swieradow-Zdroj (50054' N - 15020' E) was re-
ported in 1957 to be scheduled for reopening, this project is believed
to have been abandoned. 22/
IV. Trade
A. East-West
Between the end of World War II and 1955, the Sino-Soviet
Bloc was a net importer of tin metal from the Free World. From 1950
to 1955, Bloc imports ranged from an estimated maximum of about
6,700 tons in 1951 to a minimum of about 1,600 tons in 1954. During
this period, Bloc imports decreased both in terms of actual tonnage
and in terms of their relative importance to the total Bloc supply of
tin. In 1951, for example, imports from the Free World represented
nearly 27 percent of the total Bloc supply of tin, but in 1954, the
last year in which the Bloc was a net importer of tin from the Free
World, the share of imports had decreased to about 5 percent of the
total supply.*
In 1955 the Sino-Soviet Bloc became a net exporter of tin
metal, and exports of tin reached a high of about 27,700 tons by 1958.
These exports by year and by country of origin are shown in Table 4.**
The total value of these exports also is included.
Because the Bloc's trade in tin before 1955 had consisted en-
tirely of imports, exports by the Bloc in recent years greatly sur-
prised the producers of the Free World. Supplies of tin in the Free
World since 1950 had been considerably larger than world consumption,
with an annual surplus of 20,000 to 50,000 tons. 100/ In 1956 the
tin producers and consumers in the Free World united under the title
of the International Tin Council (ITC)*** to maintain a stable market
* See Table 10, p. 29, below.
** Table 4 follows on p. 21.
*** The operating agency of the International Tin Agreement.
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Table 4
Estimated Net Exports of Tin from the Sino-Soviet Bloc
to the Free World 2/
1955-60
1955
1956
1957 1958
1959
1960 12/
Thousand Metric Tons
USSR
Negl.
1.0
15.4 20.3
14.3
8.2
Communist China
0.7
0.7
2.0 4.1
3.8
4.2
Poland
0
o.4
0.1 3.3
0.7
0.2
Czechoslovakia
0
0.5
Negl. Negl.
0.1
0
Hungary
0
0
0 Negl.
0.1
0
North Vietnam
0
0
0 0
0
0.1
Total
2.6
17.5 27.7
19.0
12.7
Million Current US $
Estimated total
value of ex-
ports 2/
1.5
6.0
37.6 57.0
42.6
27.9
a. 101/. Imports of tin by the Bloc were virtually nonexistent dur-
ing this period.
b. Trade data for 1960 are incomplete.
c. Based on the average price on the London Metal Exchange for each
year.
price for tin by preventing a surplus or shortage of tin in the world
market. The ITC attempted to bring the supply of tin into closer
balance with demand by restricting exports from the producing coun-
tries. By 1958, however, the Bloc's exports of tin were so large that
the ITC had to reduce drastically the export quotas of the producing
countries, which resulted in severe cutbacks in production. In south-
east Asia and Bolivia, many mines were idled; unemployment increased
rapidly; and general economic distress ensued. After much adverse
publicity had accrued to the USSR, through which Bloc exports of tin
were channeled, and prolonged negotiations had taken place between the
USSR and the ITC, the USSR agreed to limit its exports to the Free
World to 13,500 tons in 1959. 102/ Late in 1959 the USSR again agreed
to limit exports of tin to 13,500 tons during 1960. 103/
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the USSR has performed
according to its agreement with the ITC. Its exports in 1959 were
only slightly more than 13,500 tons, and those in 1960 probably were
less. The agreement, however, is not binding on other countries of
the Sino-Soviet Bloc. This fact is of particular importance because
Communist China is the largest producer of tin in the Bloc, and it is
China's output that has enabled the Bloc to become an exporter of
tin. There is nothing in the tin agreement between the ITC and the
USSR to prevent China from exporting tin directly to the Free World,
which it has been doing but, so far, only in small quantities. If
China were to increase significantly its exports directly to the
Free World, Bloc tin again could raise havoc in the world tin market
In spite of the tin agreement.
B. Intra-Bloc
Communist China and the USSR are the main suppliers of tin
metal to the other countries of the Sino-Soviet Bloc. China is the
leading exporter of tin within the Bloc, shipping primarily to the
USSR. The USSR, in turn, supplies the European Satellites. Recently,
however, significant quantities of tin from China and North Vietnam
have been shipped directly to the European Satellites. In 1959, China
supplied one-third of Poland's total imports of tin and about two-
thirds of East Germany's. The pattern of intra-Bloc trade in tin in
1959 is shown in Table 5.* Although official information on intra-
Bloc trade in 1960 is not yet available, the pattern probably is
similar to that shown in Table 5.
V. Consumption
During 1950-60 the total consumption of tin in the Sino-Soviet
Bloc is estimated to have risen from about 15,000 tons to about
37,000 tons. During this period the USSR was by far the largest con-
sumer, accounting for about two-thirds of the total consumed by the
Bloc. The remainder was consumed mainly by Communist China, Poland,
East Germany, and Czechoslovakia. Estimates of the quantity of tin
consumed in each of the Bloc countries for the period 1950-60 are
given in Table 6.**
Although the USSR is the second largest consumer of tin in the
world, exceeded only by the US, 104/ where consumption was about
83,000 tons in 1960, the level of consumption of tin per capita in
the USSR and in the other countries of the Sino-Soviet Bloc, when
compared with the countries of the industrial West, is quite low,
* Table 5 follows on p. 23.
** Table 6 follows on p. 24.
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Table 5
Trade in Tin Within the Sino-Soviet Bloc 2/
1959
Thousand Metric Tons 12/
Importers
Total Intra-
East
Exporters
USSR
Poland
Germany
Hungary
Bulgaria
Rumania
Czechoslovakia
Bloc Exports
USSR
2.2
0.1
0.4
0.1
0.3
1.4
4.5
Communist China
20.8
1.1
1.1
N.A-
0
0.2
0.1
23.3
Poland
0
0.4
N.A.
0.4
North Vietnam
Negl.
Negl.
0.1
0.1
Negl.
Negl.
0
0.3
Total intra-Bloc
imports
20.8
3.3
1.7
0.5
0.2
0.5
1.5
28.5
a. 105/
b. Rounded to the nearest hundred tons. Because of rounding, components may not add to the totals
shown.
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Table 6
Estimated Consumption of Tin in the Sino-Soviet Bloc
1950-60
Thousand Metric Tons
Country'
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
USSR 2/
9.3
9.3
11.1
12.6
14.9
16.6
17.4
18.6
21.9
23.0
24.0
Poland 12/ /
2.0
2.0
1.9
1.8
1.7
1.7
1.7
2.5
2.5
2.5
2.5
Czechoslov ia c
1.3
1.5
1.6
1.7
1.7
1.7
1.7
1.8
1.8
1.5
1.5
East Germany d
1.0
1.5
1.5
0.5
1.3
1.5
1.2
1.4
1.9
2.2
2.2
Communist China 2/
0.5
0.7
0.9
1.0
1.0
1.0
2.0
2.0
3.0
4.0
5.0
Hungary 1/
0.6
0.8
0.3
0.5
0.9
0.9
0.9
1.2
0.8
1.1
1.0
Rumania12/
0.2
0.3
0.2
0.2
0.2
0.2
0.2
0.5
0.5
0.5
0.5
Bulgaria B./
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.2
0.2
0.2
Total
15.0
16.2
17.6
18.4
21.8
23.7
25.2
28.1
32.6
35.0
36.9
a. From Table 9, p. 27, below.
e. Through 1950, Communist China consumed 500 tons of tin annually. 111/ Data for 1951-60 are projected
on the basis of the increase in industrial development.
f. 112/
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as can be seen in Table 7. This low rate reflects stringent economies
in the application of tin and, in general, the emphasis on producing
capital goods rather than consumer goods. The principal use of tin in
the Sino-Soviet Bloc is in production of industrial alloys, whereas
in the Free World greater quantities of tin are used in production of
tinplate. In the USSR, only about one-third of the primary tin pro-
duced is consumed in the manufacture of tinplate. 114/ At present,
the USSR is the only country in the Bloc with a significant production
of tinplate. During the next 5 years, however, production of tinplate
is expected to increase significantly both in the USSR and in the
Satellites.
Table 7
Estimated Consumption of Primary Tin in Selected Countries
1959
Country
Kilograms ,
Per Capita 21 Country
Kilograms ,
Per Capita 2/
US
0.44
East Germany
0.13
UK
0.40
USSR
0.11
West Germany
0.32
Czechoslovakia
0.11
o
Netherlands
0.27
Italy
0.08
France
0.24
Poland
0.09
Canada
0.22
Communist China
0.01
Japan
0.13
a. Estimated by dividing the midyear population of each
country 115/ into the level of consumption. 116/
Considering the general industrial expansion and the planned in-
crease in production of tinplate, the maximum requirements for con-
sumption of tin in the Sino-Soviet Bloc in 1965 are estimated at about
55,000 tons. The USSR will continue to be the major consumer, but
the rate of increase in consumption of tin in Communist China may be
more spectacular, reflecting a more rapid pace of industrialization.
A. USSR
Consumption of tin in the USSR, the leading consumer of tin
in the Sino-Soviet Bloc, is estimated to have increased from about
9,000 tons in 1950 to about 24,000 tons in 1960, as shown in Table 6.*
* P. 24, above.
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The largest consumer of tin in the USSR is the tinplating industry.
In 1959, however, production of tinplate in the USSR was about
300,000 tons compared with production of about 4 million tons in the
US. 117/
Although the quantities consumed differ considerably, the
over-all pattern for consumption of tin in the USSR now more closely
resembles that in the US, whereas the patterns that prevailed before
World War II were quite different. The pattern of consumption of tin
in the USSR and the US in 1937 and 1955 is presented in Table 8.
Table 8
Estimated Consumption of Tin by Major Consuming Sector
in the USSR and the US
1937 and 1955
Percent
Sector
USSR
US
1937 2/
1955 12/
1937 2/
1955 Si
Tinplate
12.4
30 to 42
54.5
37.2
Bronze casting
34.7
25 to 30
5.2
21.2
Babbitt metal
32.8
More than 33 Id/
6.2
4.8
Tinning
5.5
3.4
2.9
Polygraphic metal
1.0
1.5
1.6
Solder and other
uses
13.6
29.2
32.3
Total
100.0
100
100.0
100.0
a. 118/
b. 119/
c. 120/
d. Including all alloys except bronze.
There are several factors affecting the total consumption of
tin. In the USSR in 1959, only about 20 percent of the total con-
sumption of tin was based on secondary tin, whereas in the US second-
ary tin accounted for about 42 percent of the total. 121/ About one-
half of this secondary metal in the USSR is produced from runaround
scrap and the other half from old scrap. 122/ Drives for increas-
ing the recovery of tin from scrap are being promoted in the USSR,
and substitutes for tin also are receiving considerable attention,
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along with efforts to reduce the tin content of Babbitt metal,
solders, and other alloys. Technological improvements, such as
lacquering and converting to electrolytic methods of tinplating,
also are reducing somewhat the requirements for tin in the USSR
relative to the increasing industrial output. Although these pro-
grams are expected to continue with increasing success, the total
requirements for consumption of tin in the USSR will continue to
rise, probably reaching a level of about 30,000 tons in 1965, as
shown in Table 9.
Table 9
Estimated Consumption of Tin in the USSR
1950-59 and 1965
Thousand Metric Tons
Year
Tin Plate
Consumption
Production
Content of
Primary Tin
Primary Tin 12/
Secondary Tin .2/
Total
1950
80 to 100 1.8 to 2.2
7.3 g/
2.0
9.3
1951
100
2.2
7.3
2.0
9.3
1952
124
2.7
9.1
2.0
11.1
1953
144
3.2
10.6
2.0
12.6
1954
176
3.9
12.9
2.0
14.9
1955
192
4.2
14.1
2.5
16.6
1956
203
4.5
14.9
2.5
17.4
1957
219
4.8
16.a
2.5
18.6
1958
265
5.8
19.4
2.5
21.9
1959
304
6.1
20.5
2.5
23.0
1965
403 to 435
6.9 to 7.2
24.0 .q./
3.0
27.0
a. Twenty-two kilograms of primary tin are required per ton of tin-
plate produced by the hot-dip method. 121/ The estimate for 1965 is
based on the maximum possible increase in production of tinplate con-
sistent with the planned increase in the total output of rolled metal
by the ferrous metallurgical industry (52 to 64 percent). 1211/ It was
assumed that through 1958 all the tinplate was produced by the hot-
dip process and that all the increase by 1965 will be produced by
the electrolytic method, which requires 8 kilograms of tin per ton of
tinplate. 125/
b. Tin required in the manufacture of tinplate is estimated to rep-
resent 30 percent of the total primary tin consumed. 126/
c. 127/
d. Derived by using the upper limit of the range.
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B. European Satellites
The European Satellites currently consume about 8,000 tons of
tin annually. The principal use for tin is in the form of industrial
alloys such as bronzes, Babbitt metal, and solders. Although it is
steadily increasing, production of tinplate still is small. The total
requirements for tin in the European Satellites probably will not ex-
ceed 15,000 tons in 1965.*
C. Communist China, North Korea, and North Vietnam
Although consumption of tin in Communist China probably has
increased steadily along with the rising industrial production of
that country, the domestic demand for tin in 1960 probably did not
exceed 5,000 tons.* The present demand consists largely of require-
ments for such alloys as bronze, Babbitt metal, and type metal, for
China as yet does not produce tinplate. If the initiation of a tin-
plating industry goes according to plan, however, the requirements
may increase to about 10,000 tons annually by 1965. The requirements
of tin metal for North Korea and North Vietnam are negligible.
VI. Relationship of Supply and Demand
Estimates of the annual changes in the level of tin stocks and
of the total stocks available in the Sino-Soviet Bloc can be derived
from the individual factors which comprise supply and demand and which
have been presented elsewhere in this report. These data, presented
in Table 10,** indicate that stocks of tin in the Bloc grew steadily
from 1950 through 1956, increasing by an average of about 10,000 tons
per year. A peak of about 76,000 tons was reached in 1956=57, a quan-
tity equal to about three times the rate of the estimated annual con-
sumption in 1956. In 1958, however, because of unusually large ex-
ports of tin to the West, probably about 10,000 tons were withdrawn
from stocks, and in 1959 another withdrawal probably was necessary.
Nevertheless, at the beginning of 1960 the Sino-Soviet Bloc appeared
to possess a stockpile of about 63,000 tons of tin, which may have
been increased during the year to about 67,000 tons -- about 2 years'
requirements. In comparison, the US stockpile contained more than
350,000 tons of tin as of 31 March 1960. 128/ This quantity is equal
to 4 or 5 years' requirements in the US. Other Western countries also
maintain strategic reserves of tin metal.
Most of the tin stocks in the Sino-Soviet Bloc probably are held
in the USSR. Data on exports of tin from Communist China to the USSR
See Table 6, p. 24, above.
** Table 10 follows on p. 29.
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Table 10
Estimated Balance of Supply and Demand of Tin in the Sino-Soviet Bloc
1950-60
Thousand Metric Tons
1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 2/
New supply
Primary production 2/ 14.3 16.3 23.8 26.0 28.1 31.2 33.7 41.7 48.0 50.1 51.1
Secondary production 2/ 2.0 2.0 2.0 2.0 2.0 2.5 2.5 2.5 2.5 2.5 2.5
Imports from the Free World 21/ 4.4 6.7 2.3 2.7 1.6 0.1 1.0 0 0 0 0
Total 20.7 25.0 28.1 30.7 31.7 33.8 37.2 44.2 50.5 52.6 >3.6
Demand
Net exports to the Free World 2/ 0 0 0 0 0 0.7 2.6 17.5 27.7 19.0 12.7
Domestic consumption I/ 15.0 16.2 17.6 18.4 21.8 23.7 25.2 28.1 32.6 35.0 36.9
Total 15.0 16.2 17.6 18.4 21.8 24.4 27.8 45.6 60.3 54.0 49.6
Derived change in stocks Bi +5.7 +8.8 +10.5 +12.3 +9.9 +9.4 +9.4 -1.4 -9.8 -1.4 +4.0
Estimated total stocks
(end of year)II/ 15.7 24.5 35.0 47.3 57.2 66.6 76.0 74.6 64.8 63.4 67.4
a. Preliminary estimate because of incomplete trade data. f. From Table 6, p. 24, above.
b. From Table 1, p. 9, above. g. Difference between total new supply and total demand.
c. See III, A, 3, p. 15, above. h. Stocks at the end of 1949 are estimated to have been
d. 129/ 10,000 tons. Totals for 1950-60 are cumulated stock changes.
e. From Table 4, p. 21, above.
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during 1951-54 are not available, but such shipments probably occurred
in quantity, enabling the accumulation of substantial stocks within
the USSR. The quantity of tin held in reserve by the USSR provides
some insurance against the stoppage of shipments of tin from China
as well as a strategic stockpile available in the event of any East-
West conflict. China and the European Satellites also may hold some
reserve stocks of tin metal.
By 1965 the annual production of tin in the Sino-Soviet Bloc will
be about 85,000 tons if the planned levels of production are achieved.
The estimated maximum requirements for tin in that year are about
55,000 tons. By 1965, therefore, there may be some 30,000 tons of tin
metal available annually either for export to the West or for addition
to the Bloc stockpile of tin, compared with a similar surplus of about
17,000 tons annually in the late 1950's. This quantity, if exported
to the West, again could cause considerable hardship to the underde-
veloped-countries of the West that produce tin.
VII. Internal Costs and Prices
A. USSR
The cost of production (sebestoimost') of tin in the USSR ap-
pears to be high relative to the cost of producing other intermediate
producer goods. Of the nonferrous metals for which information about
cost or price is available, tin has one of the highest costs of pro-
duction, as indicated by the following relationship of the costs of
production of selected nonferrous metals in the USSR 130/:
Metal
Index
Tin
100.0
Lead
7.7
Copper
5.6
Aluminum
5.0
That is, for what it costs the USSR to produce 1 ton of tin, it can
produce 13 tons of lead, 18 tons of copper, or 20 tons of aluminum.*
Not only is the cost of producing tin in the USSR high relative to
* Insofar as prices in the Free World indicate relative costs, tin is
a metal of higher cost than the other three. Prices in the Free World
in 1959 indicated that 1 ton of tin was approximately equal in price
to 3 tons of copper, 4 tons of aluminum, or 8 tons of lead.
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the cost for other nonferrous metals, but also it is high relative to
many other commodities. One way of expressing these relationships
between various commodities is by ruble/dollar ratios. Such ratios
have been derived for the prices of a number of commodities.* The
ruble/dollar price ratios for a few selected commodities, as shown in
Table 11,** indicate the wide gap between the ratios for tin and other
intermediate producer goods.
The high cost of production for the tin industry of the USSR
can be attributed primarily to three factors. First, the available
ore generally is of rather poor quality and is extremely complex.
Second, many of the deposits occur in areas where the winters are
long and extremely cold. Such conditions hinder all phases of mining
operations. Third, much of the ore and concentrate must be trans-
ported long distances over difficult terrain.
Althouel the cost of producing tin in the USSR in 1960 con-
tinued to be very high, the Soviet press claims that over the past
10 years significant reductions in the cost of production have been
achieved. Many of these reductions in cost are attributable directly
to improvements and changes in the mining and concentrating of tin
ores. Normally these phases of production account for a major part
of the total costs of producing tin, primarily because very large
quantities of materials must be processed.
In mining, much of the reduction in cost has been obtained
by shifting from underground to open-pit mining operations. For ex-
ample, ore mined in 1959 by underground methods at two mines in
Primorskiy Kray cost more than 125 rubles per ton, whereas ore mined
by open-pit methods at the Khingan Combine in Khabarovskiy Kray cost
less than 25 rubles per ton. 131/ Specific examples of economies
claimed to have been achieved by a shift to open-pit mining methods
include a reduction of about 50 percent in the cost of mining in
* The following assumptions were made in comparing Soviet data on
internal prices. First, the difference between average cost and
marginal cost was assumed to be the same (expressed as a percentage
of marginal cost) for all commodities cited. Second, the factor
costs (principally depreciation and interest) not included in Soviet
accounting costs were assumed to be the same proportion of account-
ing costs for each commodity cited. Altholiel capital charges as a
proportion of real costs probably are different for the various com-
modities, the difference is believed to be too mall to affect seri-
ously the analysis or to alter the sequence in the list of ruble/
dollar ratios. For a further discussion of ruble/dollar ratios, see
Appendix B.
** Table 11 follows on p. 32.
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Table 11
Ruble/Dollar Price Ratios for Selected Commodities in the USSR 2/
Commodity
Ruble/Dollar Price Ratio
Tin 48 to 1 12/
Lead 22 to 1
Aluminum 9 to 1
Copper 8 to 1
Cement 7 to 1
Sulfuric acid 7 to 1
Crude oil 5 to 1
Bricks 4 to 1 2/
Machine tools 2 to 1 21
Tool steel 2 to 1
Intermediate producer goods (average) 10 to 1
E7.7 Soviet
prices are based on 1 July 1955 rubles (old rubles -- pre-1961 rate
of exchange); and US prices are based on comparable dollar values.
b. A wide disparity exists in the USSR between the cost of producing
tin and the internal price of tin. If Soviet cost had been used in-
stead of price, the ruble/dollar ratio would have been about 36 to 1.
The gap between the ratios for tin and the other commodities, how-
ever, would continue to be large. For a further discussion of ruble/
dollar ratios, see Appendix B.
c. 133
d. ii Ii/
Magadanskaya Oblast and a reduction of more than 50 percent in the
cost of mining for the Daliolovo Combine in Primorskiy Kray. 135/
Additional reductions in cost have been achieved in concen-
trating, largely by improvements that permit the recovery of valuable
byproducts, thus reducing the cost of producing tin. At the Sherlovaya
Gora Tin Combine in Chitinskaya Oblast, for example, about 24 percent
of the cost of beneficiating tin ores now is being charged to the re-
covery of valuable byproducts. 136/
Some savings also are being obtained in smelting, primarily
through the introduction of electric furnaces. The use of such fur-
naces permits the USSR to achieve a higher rate of recovery of the
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metal contained in the concentrate and thus reduces the amount of con-
centrate required per ton of metal produced.
Further reductions in the cost of producing tin undoubtedly
will be achieved over the next 5 years. It is believed to be very
unlikely, however, that the magnitude of such reductions will be
sufficient to bring the cost of producing tin down to a level com-
parable to that of the average for intermediate producer goods. The
problems associated with the quality and location of ores appear too
great for the USSR to overcome completely.
One of the factors in the cost of producing tin that the USSR
plans to reduce is the investment requirement for new capacity in all
phases of production. As of 1960 the total investment required to
add new capacity to produce 1 ton of tin (from ore to metal) was about
330,000 rubles. 23.1/ By 1965 this investment requirement is planned
to be reduced to about 250,000 rubles. 138/
B. Communist China
Price ratios also are of little value for evaluating compara-
tive costs of production of tin and other similar products in Communist
China. In general, the Chinese include in their internal prices of in-
dustrial raw materials a very large margin of profit, which may be a
means of capital accumulation or possibly of restricting consumption of
the product. For example, the price that a smelter pays for a ton of
copper contained in concentrate includes a profit to the concentrator
of more than 100 percent. 139/
Some qualitative statements, however, can be made concerning
the probable relative cost of producing tin and other nonferrous
metals in Communist China. In contrast to the aluminum, lead, and
zinc industries, the ores mined by the tin industry are of relatively
high quality. The facilities of the tin industry not only are new but
also use a higher proportion of capital to labor than is generally
true of the Chinese nonferrous industry. Furthermore, these facili-
ties, in the main, are concentrated within one small area of about
600 square kilometers, which may permit a more efficient utilization
of at least some factors of production. On the basis of these con-
siderations, it is believed that in relation to producing other non-
ferrous products the cost of producing tin in Communist China probably
is law.
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Two other facts suggest that costs in the tin industry of
Communist China are not excessive. First, pre-Communist China, operat-
ing under capitalistic terms of reference, produced and sold signifi-
cant quantities of tin in international markets. Second, the major,
if not the sole, purpose of the rapid expansion of the tin industry
under the Communist regime has been for the sale of the product in
the export market. That a product of high cost would have been
selected for this purpose is believed to be unlikely.
C. East Germany
Although East Germany has not published quantitative informa-
tion about the cost of producing tin in that country, other informa-
tion suggests that the cost probably is high. The available ores are
extremely low in tin content and are very complex. An average of
only about 50 percent of the small tin content in the ore is recovered
in the concentrating process. 140/ Furthermore, all deposits must be
worked by underground mining operations, which are much more costly
than are open-pit operations.
?
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?
APPENDIX A
PRINCIPAL TIN ENTERPRISES IN THE SINO-SOVIET BLOC
The major tin mining and processing facilities in the USSR and
in Communist China -- the principal tin-producing areas in the Sino-
Soviet Bloc -- are shown in Table 12* and Table 13,** respectively.
The general locations of the principal tin mining and processing
facilities in the Bloc are shown in Figure 2.***
* Table 12 follows on p. 37.
** Table 13 follows on p. 41.
*** Following p. 10, above.
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Table 12
Major Tin Mining and Processing Facilities in the USSR
Location Installations
RSFSR
Region VII 2/*
Moskovskaya Oblast,
Podol'sk
Ryazanskaya Oblast,
Ryazan'
Region IX
I. Tin Plants
Podol'sk Tin Plant
Ryazan' Tin Plant
Novosibirskaya Oblast,
Novosibirsk Novosibirsk Tin Plant
* Footnote for Table 12 follows on p. 40.
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Table 12
Major Tin Mining and Processing Facilities in the USSR
(Continued)
Location
RSFSR
Region XI
Chitinskaya Oblast
Khapdheranga
Olovyannaya
Sherlovaya Gora
Yakutskaya ASSR
Deputatskiy
Ege-Khaya
Installations
II. Major Mining Installations
Khapdheranginskiy Tin Combine
Ononskoye Mining Administration
Sherlovogorskiy Mining and Concentrating
Combine
Deputatskoye Mining Administration
Ege-Khaya Ore Mining Combine ?
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Table 12
Major Tin Mining and Processing Facilities in the USSR
(Continued)
Location
RSFSR
Region XII
Magadanskaya Oblast
Pevek
Iulltin
Gal imyy
Khabarovskiy Kray
In
II. Major Mining Installations (Continued)
Chaun-Chukotskiy Ore Mining Combine
Iul'tinskiy Ore Mining Combine
OmsUkchanskiy Tin Mining Combine
Obluch'ye Khingan Tin Combine
Near Komsomol'sk Solnechnoye Tin Enterprise
Primorskiy Kray
Dal'niy Dellolovo Tin Combine
Kavalerovo Khrustal'nyy Mining and Concentrating
Combine
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Table 12
Major Tin Mining and Processing Facilities in the USSR
(Continued)
Location
RSFSR
Region XII
Primorskiy Kray
(Continued)
Tetyukhe
Khoroli
Installations 50X1
II. Major Mining Installations (Continued)
Sikhote-Alinskiy Polymetallic Combine
Yaroslavskiy Tin Combine
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a. The term region refers to economic regions defined and numbered on map 29184 (7-60), USSR: Economic
Asiministrative Regions, 1 July 1960.
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Table 13
Major Tin Mining and Processing Facilities in Communist China
Location
Yunnan Province
Kiangsi Province
Kwangsi Chuang Autonomous Region
Kwangtung Province
Unknown
Yunnan Province
Yunnan Province
Installations
I. Smelting and Refining Installations
Central Tin Plant at Ko-dhiu
K'un-ming Smelting Plant
Ta-yu Tin Refinery
Hsi-wan Concentrating and Refining Plant
Canton Refinery
Hsiang-hua-ling Tin Mine and Refinery
II. Concentrating Plants
Ku- shan
Ta-t'an
Huang-mao-shan
Rain-kuan
Ko-dhiu
III. Mines
Ma-la-ko
Lao- chang
Sung-shu-chiao
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Table 13
Major Tin Mining and Processing Facilities in Communist China
(Continued)
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Location Installations
Yunnan Province (Continued)
Kwangsi Chuang Autonomous Region
Hunan Province
Kwangsi Chuang Autonomous Region
III. Mines (Continued)
P' an-pa
Ku-shap
Huang-mao-shan
Niu-shan
P'ing-kuei Mining Bureau
Tao-yuan Tin-tungsten Mine
Hung-shui-dhai Tin-tungsten Mine
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APPENDIX B
a
RUBLE/DOLLAR PRICE RATIOS
The concept of cost of production used in the USSR and that used
in the Free World are not the same for all items of costs. The sig-
nificance of the ratios developed in this report, however, is not that
of direct relationships of the costs of producing the same commodity
in the two areas. Rather, it is the more complex idea of comparing
the costs of two separate products in the USSR in relation to the com-
parative costs of producing the same two products in the Free World.
A more serious distortion results from the use of prices in at-
tempting to equate costs of production. In general, the price of
industrial raw materials in the USSR at present appears to be derived
by dividing the total output of the product into the sum of the cost
expended in the production effort. Thus the Soviet price tends to
equate to the average cost of production. In the Free World, on the
other hand, the price tends to equate to the cost of production of
the highest cost producer in the industry (that is, the cost at the
margin). When ruble/dollar price ratios are used to make comparisons
of relative costs of production, the assumption is implicit that the
difference between the cost of the product at the margin in one econ-
omy (US) and the average cost of the same product in another economy
(USSR) is approximately equal to the proportional difference between
the cost at the margin of other products in the one economy (US) and
the average cost of the same products in the other economy (USSR).
Although prices in the Free World for many commodities may be
administered prices, the proposition is made that the costs of pro-
duction at the margin will tend to approximate the price. This prop-
osition is based on the following two observations. First, the stand-
ard practice in the nonferrous mining industries of the Free World is
to adjust the ore mix to the price. That is, as the price rises, the
average metal content of the ore mined is lowered. The purpose of
this trend is to extend the period of exploitation of the deposits
(thus maximizing profits over the long run). The result of such
action, however, is that mining costs tend to rise as the price rises.
Second, for many mining industries, such as the tin industry of Malaya,
Thailand, and Nigeria, which have large placer deposits that are suit-
able for exploitation by relatively simple operations, entry into the
industry by small operators is relatively easy.
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